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Duties concession for persons who have transferred property affected by loose-fill asbestos insulation to the State of NSW

Duties Act 1997

The Duties Act 1997 (the Act) provides a duty concession on a purchase of replacement residential property by owners of residential property that was acquired by a State authority because it contained loose-fill asbestos insulation (LFAI). Such LFAI properties must be registered with the Commissioner for Fair Trading under the Home Building Act 1989.

Duty concession

Section 104E of the Act provides a duty concession on the purchase or transfer of residential property if the Chief Commissioner is satisfied that the purchaser or transferee is or was the owner of LFAI-affected residential property acquired by a State authority.

The duty chargeable to the purchaser or transferee in connection with the replacement residential property is to be reduced by the amount of duty that would have been chargeable to the State Authority in connection with the acquisition of the LFAI-affected property (the State authority is exempt from duty under section 308 of the Act). Note, the duty can not be reduced to less than zero.

Examples where replacement property is an existing residential dwelling

I sell my LFAI affected property to the State Authority for an agreed value of $500,000 and I purchase my replacement residential property for $490,000.

I don’t pay any duty on the purchase of my replacement residential property because the value of my replacement property is not higher than the value of the property I sold.

LFAI property value

$500,000

LFAI property duty concession applied

$18,010

New property purchase price

$490,000

New property normal duty payable

$17,560

Duty payable

Nil

I sell my LFAI affected property to the State Authority for an agreed value of $400,000 and I purchase my replacement residential property for $425,000.

I will pay some duty because the value of my replacement property is higher than the value of the property I sold. This concession means I only have to pay duty on the difference, which is $1,125 ($14,635 - $13,510) on the purchase of my replacement residential property.

LFAI property value

$400,000

LFAI property duty concession applied

$13,510

New property purchase price

$425,000

New property normal duty payable

$14,635

Duty payable

$1,125

Examples where replacement property is a brand new residential dwelling or vacant land on which a brand new residential dwelling will be built

I sell my LFAI affected property to the State Authority for $425,000 and I purchase my replacement new residential property for an agreed value of $500,000.

In these circumstances you may be eligible for the LFAI property duty concession and NSW New Home Grant scheme which provides a grant of $5,000 towards the purchase of new homes, homes off the plan and vacant land on which a new home will be built.

LFAI property value

$425,000

LFAI property duty concession applied

$14,635

New property purchase price

$500,000

New property normal duty payable

$18,010

Duty payable before New Home Grant

$3,375

New Home Grant applies - duty credit

$5,000 - $3,375

Balance of Grant payable to purchaser

$1,625

Note: Balance of grant will be paid to the eligible purchaser on completion of the purchase (i.e the registration of the transfer with LPI).

I sell my LFAI affected property to the State Authority for $500,000 and I purchase replacement residential property as vacant land (with the intention to build a new home) for an agreed value of $400,000.

In these circumstances you may be eligible for the LFAI property duty concession and NSW New Home Grant scheme which provides a grant of $5,000 towards the purchase of new homes, homes off the plan and vacant land on which a new home will be built.

LFAI property value

$500,000

LFAI property duty concession applied

$18,010

New property purchase price

$400,000

New property normal duty payable

$13,510

Duty payable before New Home Grant

Nil

New Home Grant applies – duty credit

$5,000

Balance of Grant payable to purchaser

$5,000

Note: Balance of grant will be paid to the eligible purchaser on completion of the purchase (i.e the registration of the transfer with LPI).

Frequent questions

Can I enter into a contract to buy my replacement property before I enter into a contract to sell my LFAI affected property to the State Authority?

No, you must enter into a binding agreement with the State Authority before entering into a contract to purchase your replacement property.

Can I get the duty concession if I purchase vacant land?

Yes, if you have sold or agreed to sell your LFAI affected property to the State Authority and you purchase vacant residential land, the contract to purchase the vacant land will be entitled to the duty concession. You may also be eligible for the NSW New Home Grant scheme.

Can the concession apply to a purchase where the purchaser is different from the person who sold the LFAI affected property to the State authority?

Depending on the circumstances you may be eligible. Please check eligibility with Revenue NSW on one of the telephone numbers below.

Is there a time limit from the date I sell my LFAI affected property to buy my replacement property?

No, there is no time limit.

If 2 people own the LFAI affected property and they each purchase a replacement residential property, do they both get the concession?

No, under section 104E(6) only one duty concession may be granted for each LFAI acquisition.

Note: Where 2 people own the LFAI affected property and only 1 person makes a claim for the duty concession on the purchase of a replacement residential property, written consent will need to be provided by the other owner.

Can I get the duty concession if I sell my LFAI affected property in NSW and buy my replacement property in another state?

No, you must sell the LFAI affected NSW property and buy your replacement property in NSW.

If I have already paid my duty for my replacement property, can I apply for a re-assessment and refund?

Yes, You will need to lodge the full original stamped contract and a cover letter requesting the matter to be re-assessed under the LFAI scheme.